View in your browser.

Under an executive model based on community organizing, the process for achieving political goals involves astroturfed spectacles set up for overhype by willing media, to heighten the desired impression that the goal of the moment is desperately craved by a public yearning for Washington politicians to save them. Such a process is evident in this year’s long-telegraphed push for a minimum-wage increase.

This week witnessed a multi-city strike by fast-food workers seeking, supposedly, unionization and $15/hour wages. The narrative is that fast-food restaurants could definitely afford to pay their workers that much, buttressed as it were by research purporting to show that

If McDonalds were to double the salaries and benefits of all of its employees, from the CEO down to the minimum wage cashiers, it would still only cost an extra 68 cents for a Big Mac, according to a new report.

First off, even taken at face value, the notion behind such a report is bunk. The overarching assumption — that McDonald’s consumers are bound into inevitable Big Mac consumption; in economic parlance, that the demand for McDonald’s food is perfectly inelastic — is flat-out ridiculous.

The underlying assumption is just as ridiculous: that McDonald’s doesn’t know its own business and has this diabolical plan to hire someone and then oppress him. A 68-cent increase in the price of a Big Mac would be a significant price increase, which would no doubt upset a carefully constructed business model with tight profit margins (which are furthermore faced by franchisees, who are local entrepreneurs). Upset the model, and you upset the ability for the business to continue, which means you upset its ability to remain in business and therefore to employ anyone at all.

This is a chain, after all, that has weathered the last few years of rising prices and economic doldrums by nevertheless protecting its "Dollar Menu" items. Why? So it can "abuse" the poor people it employs, or so it can remain successful in the business model it has perfected in serving poor people the "greatest food in human history" (in terms of cost per calorie)?

The study (by an undergraduate at the University of Kansas) could not be taken at face value, however, not even by the Huffington Post, which scrubbed its initial story with a mea culpa. It nevertheless has had its effect, as the sensational mistaken impression it created was enough justification to move to the next stages of organization: an off-base petition against McDonald’s and Wal-Mart by former Labor Secretary Robert Reich, and the aforementioned strikes.

The real reason fast-food workers are upset: Obamacare

Local coverage by WRAL and The News & Observer both managed to avoid the elephant in the room. The N&O (emphasis added):

Other fast-food workers said their part-time hours and low pay make them reliant on government assistance. Ladondre Pretty, who works at the Raleigh Little Caesars, said he has five kids and relies on his wife’s food stamps to survive.

"My checks are not even $200 every two weeks," he said, adding that he wasn’t given credit for eight years of experience at a Kentucky Fried Chicken restaurant. The pizza manager, he says, told him "No, we’ve got to start you off at $7.25 an hour."

Pretty, who sometimes works only 13 hours a week, said his teenage son’s part-time movie theater job brings home more money. Pretty wasn’t exactly on strike Thursday; he says he was left off the schedule all week after calling in sick Saturday.

WRAL (emphasis added):

"When I saw the strikes on TV earlier this summer in New York and Chicago, I said to my co-workers, ‘We need to bring this to Durham,’" said Willieta Dukes, a 39-year-old Burger King employee.

A $15 hourly wage, almost double the $8.56/hour average for North Carolina fast-food workers, would equal about $31,000 a year for full-time employees. It’s more than double the federal minimum wage, which many fast food workers make, of $7.25 an hour, or $15,000 a year.

Dukes has been at the Durham Burger King for about a year. She hoped to be full time but recently saw her hours cut to about 27 a week.

"I enjoy my work. I enjoy serving people," she said. "Why should I have to do something else when they cut back on our hours? They tell us we’re good. Why can’t they pay us what we are worth?"

Here’s why: Obamacare. It has created perverse incentives for employers across the nation to add only part-time jobs.

As reported in July, part-time jobs are at an all-time high, while full-time jobs are declining. Halfway through this year, only 130,000 full-time jobs have been added, dwarfed by 557,000 additional part-time jobs — nearly six part-time jobs for every full-time job.

Forbes warned in May that

employers are already reacting to ObamaCare. In fact, there was a huge shift to part-time employment in the fast-food industry beginning in January. The reason: ObamaCare will employ a 12-month "look back." That is, in deciding whether a worker is full-time or part-time next January (when the mandate becomes effective) the government will look at the average weekly hours worked in the previous year.

One fast-food restaurant owner I talked with (owning 100 franchises) told me that the average workweek for their employees has been reduced to 25 hours this year — compared with 38 last year. (Emphasis added.)

Money Morning said in July that "America has become a part-time nation," and explained that

Obamacare has likely played a significant role in the part-time job wave. Under the Affordable Care Act, companies with 50 or more full-time workers must provide health insurance to all full-time employees, those working 30 or more hours per week.

So if your workers don’t work 30 hours per week you don’t have to provide health insurance. It makes economic sense to have a part-time work force in many cases. Even with the administration’s recent one-year extension of implementing the employer mandate until 2015, most small companies are still preparing to it.

A reported 74% of small businesses are positioning themselves to slash hours, layoff workers or both. (Emphasis added.)

The Wall Street Journal wrote in February about "job sharing" in reaction to Obamacare:

It’s already happening across the country at fast-food restaurants, as employers try to avoid being punished by the Affordable Care Act. In some cases we’ve heard about, a local McDonalds has hired employees to operate the cash register or flip burgers for 20 hours a week and then the workers head to the nearby Burger King or Wendy’s to log another 20 hours. Other employees take the opposite shifts. …

Many franchisees of Burger King, McDonalds, Red Lobster, KFC, Dunkin’ Donuts and Taco Bell have started to cut back on full-time employment, though many are terrified to talk on the record. Activist groups have organized boycotts against Darden Restaurants, which owns Olive Garden and Red Lobster, for daring to publicly criticize ObamaCare. It’s safer to quietly dodge the new costs and avoid becoming a political target. (Emphasis added.)

Other restaurants have also announced being forced to go the part-time route, including Papa John’s, White Castle, Subway and many others across the United States. And it’s not just fast-food restaurants, of course; it’s businesses everywhere, and the reason behind it is becoming more evident. Which might also be prompting the community organizing to double down on trying to make the employers — forced by Obamacare dictates to cut the hours of their employees in order to stay afloat — look like Bad Guys supposedly not raising their prices so they can keep Great Profits as opposed to paying their employees Double Wages.

It’s an ugly business; politics at its worst and most immoral. Taking advantage of the poorest and least skilled to turn them into pawns for a notion that would, if enacted, do them the most harm. Convincing them to walk off the job for higher wages is the most obvious self-defeating proposition since "spend our way out of this recession."

There is, furthermore, a point at which employees become priced out of the market entirely. In 2011, for example, McDonald’s in Europe announced "Cashiers out, computers in":

About 7,000 of the fast food franchise’s locations in the United Kingdom will be fitted with the touch screen technology, which aims to make the McDonald’s experience more convenient and accommodating.

The touch screen method of ordering will improve efficiency and make the average transaction three to four seconds faster for each customer, Steve Easterbrook, president of the European branch of McDonald’s, told the Financial Times. (Emphasis added.)

In sum

Big-government meddling has forced fast-food employers to cut employees’ hours nearly in half. Facing the same expenses as before, employees want their wages nearly to double. Big-government meddlers want them to demand — whoah! not an end to Obamacare! — even more big-government meddling, this time in the minimum wage. Which is a proposition that’s had negative, counterproductive results against the poorest and least skilled workers every time it’s been tried.


As if on cue, the following two headlines are on the Drudge Report today:

Click here for the Rights & Regulation Update archive.